Groupe Encore I.T.S. gets a ticket
to the top
Travel agency succeeds by keying in on business clientele

Travel agencies have taken a big in recent years. As if the
elimination of the commissions that airlines pay them weren't
enough, the effects of the 9-11 events and the stock market slump
have thrown the industry into a tailspin. But one company that
seems to be weathering the storm is Groupe Encore I.T.S.

Just don't call them a traditional travel agency. "We
are a travel management firm," said Monique Mardinian, Groupe
Encore I.T.S.'s president, founder and sole owner. "Ticket
sales are the least important thing that we do.

In a cut-throat industry, Mardinian has kept her company a
step ahead of the competition by concentrating on the lucrative
corporate market, providing travel management services to companies
with larger budgets, typically exceeding $1.5 million a year.

Packages are custom tailored to each client's individual needs.
Services can include negotiations with airlines, railways and
hotels, travel database management, as well as specialized reporting
and education seminars.

Groupe Encore I.T.S. competes against much larger and established
U.S.-owned players such as American Express and Carlson Wagonlit
Travel. But according to one customer Groupe Encore I.T.S. has
a unique advantage.

"They are relatively small and can offer a personalized
service," said Charles Roberge, director of information
technology at Air Liquide Canada. "They design products
to meet your needs, which is something bigger companies have
a harder time doing."

Mardinian got into the travel business early, when she bought
a small, financially troubled traditional agency in 1987, about
a year after graduating from Concordia University.

"I studied actuarial mathematics, which was a pretty
boring subject," said Mardinian. "I tried many part-time
jobs. Then one day a got a part-time job doing the bookkeeping
in an agency, and I got bitten with the travel bug."

Soon after, despite the fact that she had almost no experience,
Mardinian picked up the Yellow Pages, and started phoning agencies
looking for one to acquire. She soon found a suitable candidate
on the upper floors of Place Bonaventure, and somehow managed
to convince a bank manager to lend her most of the $58,000 needed
to buy the place.

But that was the easy part. Next came three years of 16 to
18-hour days. "Fear is a great motivator. I didn't have
money or experience. I had nothing to put into the business except
my time," said Mardinian. "But when you love what you
are doing you don't count the hours."

Slowly but surely Mardinian broadened her customer base beyond
the agency's original client list. But it was when she landed
the Hitachi Canada travel account in 1990, that she really knew
that she was on to something special.

According to Mardinian, Groupe Encore I.T.S. is now the largest
Canadian-owned travel management company. Sales during 2001 were
close to $40 million, and are on track to hit $50 million in
2002.

It's not a bad performance in an industry that according to
the International Air Transport Association has seen a 8.9 per
cent drop in North American revenue-passenger kilometers traveled
between January and July 2002, compared to the corresponding
period in 2001.

According to Michel Peladeau, director of Finance at Ericsson
Canada, one of Mardinian's biggest clients, managing the comings
and goings of company personnel is a key challenge for business
today.

As with many of its accounts, Groupe Encore I.T.S., assigns
several of its staff employees to work directly out of Ericsson's
offices. These employees act as Ericsson's quasi in-house travel
department. In fact more than half of the agency's 45 personnel,
work off-site, in customer's offices.

Unlike traditional travel agencies which bill customers in
the form of service charges, Groupe Encore I.T.S. prefers to
bill an annual management fee, combined with an incentive program
to reward the agency for cost savings it generates.

"If an agency manages a $5 million travel account, and
is paid as a percentage of the budget, what incentive do they
have to reduce expenses?" asked Mardinian. "So we create
a win-win environment where both our clients and us can come
out ahead."

Savings are calculated by periodically comparing the price
the client paid for its tickets in a given period, with the published
IATA rates.

According to Mardinian clients are less reluctant to book
travel with an agency, if they don't have to pay premium to do
so. As a result they tend to consolidate their purchases with
Groupe Encore I.T.S., which makes it easier to for the firm track
expenditures and to negotiate volume rebates for their clients.

But despite her success, Mardinian can't just sit still. The
industry is consolidating, and Groupe Encore I.T.S., is in a
position where the company will have to grow either through acquisitions
and organically.

Photo caption: Monique Mardinian grew Groupe Encore I.T.S. into
one of the country's largest travel management firms by focusing
on the corporate market.

Sidebar: Mardinian's strategy for getting ahead

o Choose an industry that you love so that the long hours
don't feel like work
o Focus on a business clientele
o Tailor product offering to provide customers with personalized
travel management solutions
o Create a win-win situation by billing using a management-fee
structure that rewards the agency for saving the client money